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The RRG Blog has a Resources and a Commentary category. Commentary is only visible for registered and logged in users.

Julius de Kempenaer is the creator of Relative Rotation GraphsTM together with Trevor Neil he will write the blog entries for the RRG-free and the RRG-pro blog sections of this site. If you are looking for specific subjects or would like Julius to contribute on a speific subject, at least loosely related to RRG or Relative Strength in general,... please post your question in the forum or send julius a direct message. More

SPY Arrived In "Trouble Territory"


After the sharp sell-off in Q4 of last year, the market (SPY) started to recover from its lows near 235. And IMHO it is still a "recovery" before turning down again as opposed to a "turnaround" back up.

This weekly chart above clearly shows that the rhythm of lower highs followed by lower lows is still in play and for a turnaround to become a possibility we need, at the minimum a first higher low, i.e., above 235 or a new high, i.e., above 280, to be put into place. 

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Long Tail And Strong RRG-Heading For IRM


The Relative Rotation Graph above highlights the rotation of IRM (Iron Mountain Inc.) in comparison to the other stocks in the S&P Real-Estate sector (XLRE).

The sector itself is interesting to keep an eye on as it is positioned well inside the leading quadrant but rolling over, at high JdK RS-Ratio levels, on the weekly RRG. But it is inside the lagging quadrant and curling up on the daily RRG. 

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Relative Rotation Graphs And Factor ETFs


It's Friday morning in Amsterdam and I just dropped my daughter off at school. On the way to my office, I usually stop at the local Coffee Company for a cappuccino and reading some, market-related, news, blogs etc.

For some reason, I noticed a lot of talk and articles on factor investing, factor ETFs, factors that drive markets. Pretty much "factors" all over the place. While looking out of the window, yes it was a rainy day, I was thinking about a way to use Relative Rotation Graphs in combination with "factors".

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This DOW stock is pushing to new relative highs and rotates back into the leading quadrant on the Relative Rotation Graph


Visa is showing up, just, inside the leading quadrant on the Relative Rotation Graph vs $INDU above. These images are zoomed in from the RRG holding all the 30 DJ Industrials stocks (benchmark $INDU).

The tail in the chart on the left above shows 30 weeks of rotation and as you can see the week-to-week observations are all close together (the white dots on the tail) causing a relatively short tail compared with other stocks on the plot.

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NIFTY (India) As An Alternative For SPY (US Stocks)


With the US stock market declining investors (may) need to look for alternatives in order to preserve capital. Sure enough, there are good opportunities in the US with bonds, IEF is doing very well, and cash is a very viable alternative if you do not "need" to be invested.

If you are in a position where you do need to be invested in stocks or you want to keep an allocation to stocks in your portfolio, even if it is an underweight position, you might need to look outside the US for alternatives.

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If the SPY:IEF ratio is going to test its support at the 2015 peaks where do SPY and IEF prices need to go?


The above chart shows the stocks/bonds ratio using monthly bars since 2004. IMHO this is one of the most useful charts to decide on an important portion of the asset allocation in your portfolio. Should you invest in stocks or in bonds. In other words, "Risk ON" or "Risk OFF".

It is a basic relative strength chart but now using bars instead of a line chart. this is to show that during a month the relative strength (ratio) can move wildly. A bar chart will give a better, more detailed, view of how, trends in, RS moved when using long-term (monthly) charts like this.

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Relative Rotation Graph Shows BOB (EXC & WELL) vs WOW (NBL & FTV) Stocks


In my previous post, I highlighted both the Real-Estate and the Utilities sectors as (strong) outperformers during this weak period for stocks in general. This "Double + for Utilities and Real Estate on Relative Rotation Graph" pointed to the position inside the leading quadrant for both sectors on both the weekly AND the daily time frames.

Frequent readers of this blog or people who have heard me speak at some event probably already know that I think that most investors are too focussed on "what to buy" as opposed to being aware of "what NOT to buy".

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Double + For Utilities And Real Estate On Relative Rotation Graph


The market keeps throwing us curve balls on a daily basis. The Relative Rotation Graph above translates these curve balls into (sector-) rotational patterns.

The weekly chart above shows continuing strength for Utilities and Real Estate as they continue to move higher on both axes of the RRG.

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RRG Says Stocks Are The Weakest Asset Class


The Relative Rotation Graphs shows the rotation of various asset classes around a balance benchmark portfolio (VBINX).

The message could not be more clear. Stocks (SPY) just crossed over from weakening into the lagging quadrant while ALL other asset classes are inside the leading quadrant.

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Plotting breadth indicators on Relative Rotation Graphs - Part II


After finishing the previous article on plotting breadth indicators on Relative Rotation Graphs I have spent hours and hours on studying probably a couple of thousand different RRGs holding various groups of sectors in combination with their breadth equivalents.

And although I did not find the perfect prediction tool or the ideal leading indicator I do think using these alternative data series on RRGs can function as a piece of the puzzle that we are trying to solve.

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Plotting breadth indicators on Relative Rotation Graphs - Part I


In my contribution to last week's Chartwatchers newsletter, I mentioned my current experiment on using breadth indicators on a Relative Rotation Graph.

In this article, I want to take a look at a few of these setups side by side and see if there is indeed a leading tendency for breadth to lead price on the RRG as it tends to do on regular charts as well.

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Using RRG to find some good and some not so good names inside the DJ Industrials index.


The relative rotation graph above shows the rotation of the 30 DJ Industrials stocks. Watching the interaction on the canvas, a few rotations catch the eye.

Inside the lagging quadrant IBM, HD, and DWDP are clearly moving deeper into negative territory. On the opposite side inside the leading quadrant, we find MCD, WBA, PG, and WMT at strong RG headings moving higher on both axes.

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Some utility stocks worth paying attention to


The relative rotation graph above shows a selection of stocks in the utilities sector. I have created this zoomed in version for better visibility. The fully populated RRG can be found here.

In this post, I will highlight a few of the stocks shown in the picture. As XLU is now one of the sectors inside the leading quadrant vs SPY and continuing higher on both axes. I will focus on a few names that are expected to fuel further relative strength in utility stocks but also point to one that is better avoided.

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RRG Online now has a Full-Screen mode

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The RRG Online implementation that we are running on our site here now has a button to switch the graph to full screen. This will help you to increase the use of available screen real-estate to its maximum potential.

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Testing a new version of RRG-Online

RRG-OLO-full-1

As you may know, we have an implementation of RRG-Online on our site for a while already.

This has been and will always be an entry-level implementation with limited universes and limited functionality available.

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RRG Desktop application (BETA)

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Over the past few weeks, we have started rolling out a beta version of a stand-alone "RRG-Desktop" application. This utility is geared towards us...
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The background of Relative Rotation Graphs®

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Relative Rotation Graphs slowly came to life while I was working as a sell-side technical analyst for an investment bank in Amsterdam.


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The RS (Relative Strength) concept

The RS (Relative Strength) concept

"Relative Strength" or RS is a widely used concept in technical analysis to compare the price performance of one security against the price performance of another security in order to choose which one of the two is to prefer over the other.


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Recent comment in this post
Joe David Myers
Good info
Wednesday, 26 April 2017 02:24
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Construction of Relative Rotation Graphs

Construction of Relative Rotation Graphs

The construction of Relative Rotation Graphs is based on a scatter plot. The video at the end of the post shows the rotation through the various stages on the plot, with a short explanation for every stage. 

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Back testing RRG?

Back testing RRG?
  Can Relative Rotation Graphs be back tested? ​O r, what is the track-record for RRG? These are probably the two most frequently asked questions...
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